Many Mangawhai people are still refusing to pay rate arrears in protest at the Kaipara District Council's borrowing for an $80 million sewerage scheme.
The council has begun suing those who are holding out.
The Mangawhai Residents and Ratepayers Association (MRRA) said some people whose jobs depend on a good credit-rating have given in and paid up.
But MRRA chair Bruce Rogan said the rate demands were flawed and unenforceable and the association would meet the defence costs for those who wanted to challenge them in court.
Mr Rogan said the defects included penalties charged on GST, which he said were unlawful.
He said the Mangawhai residents have been heartened by a recent Auckland District Court decision, involving rates activist Penny Bright, in which the judge warned that rate demands must be legally compliant to be enforceable.
The council was unable to provide comment this morning.
The Kaipara Council has been relying on a parliamentary bill which it said validated all rates charged for the Mangawhai sewerage scheme.
The MRRA is challenging that in a case set down for August in the Court of Appeal.
It said the council should have waited for the outcome of that case before suing ratepayers for arrears.